EDUARDO C. ROBRENO, District Judge.
I. INTRODUCTION .......................................................713 II. BACKGROUND..........................................................713 III. DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM..............................................................714 A. Legal Standard...................................................714 B. Discussion.......................................................715
IV. DEFENDANT'S MOTION TO DISMISS ON CONSTITUTIONAL GROUNDS..............................................................717 A. Historical Background............................................717 1. Legislative History ..........................................717 2. Recent Caselaw Developments ..................................717 B. Current Constitutional Landscape.................................719 1. Morrison's Sufficient Control Test............................719 2. Caselaw Finding Section 292(b) Unconstitutional...............720 3. Caselaw Rejecting Constitutional Challenges to Section 292(b).722 C. Discussion.......................................................722 1. Morrison's Sufficient Control Test Governs....................723 2. Application of Morrison.......................................724 V. CONCLUSION..........................................................726
Plaintiff Bruce Rogers ("Plaintiff") brings this qui tam action against Defendant Tristar Products, Inc. ("Defendant"). Plaintiff alleges that Defendant falsely marked one of its products as patented for the purpose of deceiving the public in violation of the False Marking Statute, 35 U.S.C. § 292, and seeks recovery under a qui tam enforcement provision in the statute that permits "[a]ny person [to] sue for the penalty." Id. § 292(b). Defendant moves to dismiss Plaintiff's complaint on two grounds. First, Defendant contends that Plaintiff's complaint fails to state a claim upon which relief can be granted. Second, Defendant urges that the qui tam provision of the False Marking Statute is unconstitutional under Article II of the United States Constitution.
As outlined below, the Court finds that Plaintiff's complaint states a claim under the False Marking Statute. The Court concludes, however, that the qui tam provision under which Plaintiff proceeds violates the Take Care Clause in Article II of the United States Constitution and is therefore unconstitutional. Consequently, Defendant's motion to dismiss will be granted.
Defendant markets and sells the Jack LaLanne Power Juicer (the "Power Juicer") line of products in the United States
Notwithstanding the representations made in Defendant's advertisements, the only patent held for the Power Juicer line is a Chinese patent (the "China Patent") that covers the products' design aspects only. (See id. ¶¶ 13-15.) This patent represents Defendant's "complete and collective efforts to obtain any patent with respect to its Power Juicer line," (id. ¶ 14), and does not cover any of the Power Juicer lines' technology or address functional aspects such as juice extraction, (see id. ¶¶ 15-16.) Put another way, the China Patent has "nothing to do" with any of the abovementioned patent references made in Defendant's advertisements. (Id. ¶ 15.) Plaintiff confirmed as much by undertaking a "diligent patent search," which led Plaintiff to believe that Defendant's claims of having a patent on the Power Juicer's functional aspects, including juice extraction, are false and misleading. (Id. ¶ 16.)
III. DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM
A. Legal Standard
In considering a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the court must "accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." DeBenedictis v. Merrill Lynch & Co., Inc., 492 F.3d 209, 215 (3d Cir.2007) (internal citations omitted). In order to withstand a motion to dismiss, a complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 & n. 3, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555, 127 S.Ct. 1955 (internal citation omitted).
Although a plaintiff is entitled to all reasonable inferences from the facts alleged, a plaintiff's legal conclusions are not entitled to deference and the court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (cited with approval in Twombly, 550 U.S. at 555, 127 S.Ct. 1955). The pleadings must contain sufficient factual allegations so as to state a facially plausible claim for relief. See, e.g., Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190 (3d Cir.2009). A claim possesses such plausibility "`when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Id. (quoting
The False Marking Statute provides that "[w]hoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word `patent'... for the purpose of deceiving the public ... [s]hall be fined not more than $500 for every such offense." 35 U.S.C. § 292(a). "Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States." Id. § 292(b). A plaintiff proceeding on a false marking claim must therefore "establish (1) the marking of an unpatented article; (2) with the intent to deceive the public." Hollander v. B. Braun Med., Inc., No. 10-835, 2011 WL 1376263, at *2 (E.D.Pa. Apr. 12, 2011); see also Rogers v. Conair Corp., No. 10-1497, 2011 WL 1809510, at *2 (E.D.Pa. May 12, 2011).
A plaintiff shows that an article is "unpatented" under the statute if "the article in question is not covered by at least one claim of each patent with which the article is marked." Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed.Cir.2005). This necessarily requires consideration of whether "the claims of a patent cover the article in question." Id. In addition to showing that such an item is falsely marked, a plaintiff must demonstrate that the defendant "act[ed] with sufficient knowledge that what it is saying is not so and consequently that the recipient of its saying will be misled into thinking that the statement is true." Id. Because this element sounds in fraud, Rule 9(b) applies and plaintiffs must therefore "state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b); see In re BP Lubricants USA Inc., 637 F.3d 1307, 1311 (Fed. Cir.2011) (applying Rule 9(b)'s "gatekeeping function" to claims under the False Marking Statute). This particularity requirement, however, does not apply to "[m]alice, intent, knowledge, and other conditions of a person's mind." Fed. R.Civ.P. 9(b). Nevertheless, a plaintiff proceeding on a false marking claim must "allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind." In re BP Lubricants, 637 F.3d at 1311 (quoting Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed.Cir. 2009)).
Here, Defendant argues that Plaintiff's complaint fails to satisfy the pleading standards set forth in Rules 8(a) and 9(b). Specifically, Defendant contends that Plaintiff's pleading does not allege any facts from which an intent to deceive the public may be inferred. In support of this contention, Defendant points to what is missing from Plaintiff's complaint:
(Def.'s Mot. to Dismiss, doc. no. 6, at 14-15.) Plaintiff responds that the complaint satisfies Rules 8(a) and 9(b) because it describes how, where, and when Defendant falsely advertised that its product's technology was patented when, in fact, it is not. Plaintiff is correct.
Plaintiff's complaint, after all, pleads that the only patent for the Power Juicer
Such knowledge can be readily inferred because the facts pled, if true, establish that Defendant's advertisements were a complete falsity. See U.S. ex rel. Hallstrom v. Aqua Flora, Inc., No. 10-1459, 2010 WL 4054243, at *1, 5 (E.D.Cal. Oct. 15, 2010) (applying Rule 9(b) and denying defendant's motion to dismiss where the complaint averred that the defendant falsely marketed its products as patented when there was no patent covering the product as advertised). Moreover, the allegations "address who, what, when, where, and how [Defendant] ... allegedly violated the false marking statute." Id. at *5; see B. Braun Med., 2011 WL 1376263, at *3. Namely, that Defendant advertised on infomercials and the internet that the Power Juicer products are patented in a manner which they are not.
Under this posited scenario, Defendant cannot seriously contend that the requisite intent to deceive cannot be readily drawn from the facts pled.
Thus, the Court will deny Defendant's motion to dismiss for failure to state a claim upon which relief can be granted.
IV. DEFENDANT'S MOTION TO DISMISS ON CONSTITUTIONAL GROUNDS
Defendant next argues that the qui tam provision of the False Marking Statute violates Article II of the United States Constitution. Because Plaintiff proceeds in this false marking case as a qui tam relator, see 35 U.S.C. § 292(b) ("Any person may sue for the penalty [provided under the statute], in which event one-half shall go to the person suing and the other to the use of the United States."), Defendant asks the Court to dismiss Plaintiff's complaint in its entirety. In the Court's view, although not previously subjected to robust judicial treatment, Defendant's constitutional challenge is best understood in the context of the False Marking Statute's history. The Court's discussion therefore begins with the relevant historical background.
A. Historical Background
1. Legislative History
Congress enacted the first iteration of the False Marking Statute in 1870, establishing "a penalty of not less than one hundred dollars, with costs" for every violation of the statute. Patent Act of 1870, ch. 230, § 39, 16 Stat. 198, 203. This remedy was to be pursued exclusively by private citizens in exchange for half of the penalty recovered:
Id. Congress revised the statute in 1952, replacing the $100 minimum penalty with a $500 maximum penalty. See Patent Act of 1952, ch. 950, § 292(a), 66 Stat. 792, 814 (stating that those who violate the statute "[s]hall be fined not more than $500 for every such offense"); S.Rep. No. 82-1979, at 22 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2424 ("The minimum fine, which has been interpreted by the courts as a maximum, is replaced by a higher maximum.").
In addition, the 1952 amendment made the statute a criminal one that could be enforced by either the United States or by qui tam relators. See S.Rep. No. 82-1979, at 9 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2403 ("[T]his section ... makes it an ordinary criminal action as well as an informer action as in the present statute."). The statute remains in such form today; section 292(a) constitutes the criminal provision, while section 292(b) serves as the separate qui tam enforcement mechanism. See 35 U.S.C. § 292; S.Rep. No. 82-1979, at 22 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2424 (stating that the "informer action is included as additional to an ordinary criminal action").
2. Recent Caselaw Developments
Despite its lengthy history, much of the statute's legal development has occurred in the wake of the Federal Circuit's 2009 ruling that the False Marking Statute "requires the [statutory] penalty to be imposed on a per article basis." Forest Grp., Inc. v. Bon Tool Co., 590 F.3d 1295, 1301 (Fed.Cir.2009). Indeed, by ruling that each individual violation of the statute gives rise to a separate penalty as opposed to one penalty for the decision to falsely
Given the considerable increase in qui tam litigation under the statute and the high stakes Forest Group's valuation method gives rise to, false marking defendants have vigorously pursued a number of different legal challenges to the statute. For example, many defendants have asserted Article III standing objections which, initially, some courts accepted on the grounds that the statute assigns to "any person" the right to enforce the United States' sovereign interest in having its laws followed.
B. Current Constitutional Landscape
Defendant's contention that section 292(b) violates Article II's Take Care Clause is illustrative of this development.
In the wake of the Federal Circuit's decision in Stauffer, several false marking defendants have lodged similar contentions with varying results.
The Court now turns to summarize Morrison's test, before discussing the split in authority amongst courts considering the constitutional challenge asserted.
1. Morrison's Sufficient Control Test
In Morrison v. Olson, the Supreme Court considered a constitutional challenge to the Ethics in Government Act (the
Espousing and applying the abovementioned sufficient control test, the Court upheld the EGA. In doing so, it pointed to the fact that (1) the Attorney General had the power to remove the independent counsel for good cause; (2) the decision to appoint an independent counsel was within the Attorney General's discretion; (3) the independent counsel's jurisdiction was defined by reference to facts submitted by the Attorney General; and (4) the independent counsel was required to comply with Justice Department policy whenever possible. See id. at 696, 108 S.Ct. 2597. Under these circumstances, the Court concluded, the EGA did not violate separation of powers principles because it left the Executive Branch with "sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties." Id.
2. Caselaw Finding Section 292(b) Unconstitutional
Drawing on the analysis in Morrison, the Unique court held that section 292(b) violates the Take Care Clause because it does not afford the President sufficient control over litigation commenced under the False Marking Statute. Central to this finding, of course, is the Unique court's corresponding determination that the test set forth in Morrison applies in the first instance. This conclusion, as the Unique court acknowledged, see Unique, 765 F.Supp.2d at 1003-04, has been a subject of some debate; several courts have held that Morrison does not neatly apply to challenges to qui tam statutes.
For example, the en banc Fifth Circuit held that Morrison was not necessarily relevant to determining the constitutionality of the False Claims Act's qui tam provision because (1) the EGA assigned the independent counsel the responsibility of acting on behalf of the United States while qui tam relators under the False Claims Act merely "bring a lawsuit in the name of the United States"; and (2) unlike the independent prosecutors empowered to undertake criminal prosecutions for the United States under the EGA, "relators are simply civil litigants." Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 755 (5th Cir.2001) (en banc). For substantially similar reasons, the Eastern District of Virginia deemed Morrison inapplicable to a challenge to the False Marking Statute's qui tam provision. See Pequignot, 640 F.Supp.2d at 726-27 (holding "it is not necessary for § 292(b) to meet the demanding standard applied by the Supreme Court in Morrison," largely because the action pursued by a section 292(b) relator is "a civil action, not a criminal one").
Despite this contrary authority, the Unique court concluded that Morrison's test governed its analysis. First, it intimated that it was bound to apply Morrison's sufficient control test given that the Sixth Circuit had done so in upholding the constitutionality of the qui tam provision in the False Claims Act. See Unique Prod., 765 F.Supp.2d at 1002 ("The Sixth Circuit Court of Appeals has relied upon Morrison to uphold the qui tam provisions of the [False Claims Act] ...." (citing U.S. ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., 41 F.3d 1032 (6th Cir. 1994))); Unique Prod., 2011 WL 924341, at *3 ("[T]he Court believes that, because it must follow the Sixth Circuit's application
Having concluded that the Morrison analysis controlled the inquiry, the Unique court held that the qui tam provision in the False Marking Statute was unconstitutional because it conferred law enforcement authority upon private individuals without sufficient reservation of control to the United States:
Id. at 1005 (internal citation omitted). This delegation of authority, as the Unique court found, is particularly troublesome in light of the recent developments described supra in Part IV.A.2:
Id. (internal citations omitted).
For these reasons, the Unique court concluded that section 292(b) fails Morrison's sufficient control test and violates the Take Care Clause. See id. at 1006.
3. Caselaw Rejecting Constitutional Challenges to Section 292(b)
In so holding, the Unique court's decision lives up to its name; to date, every other court that has considered section 292(b)'s constitutionality under Article II has rejected the challenge asserted. See Simonian v. Allergan, Inc., No. 10-2414, 2011 WL 1599292, at *4-5 (N.D.Ill. Apr. 28, 2011); Luka, 785 F.Supp.2d at 721, 2011 WL 1118689, at *8; Ford, 2011 WL 1259707, at *3; Buehlhorn v. Univ. Valve Co., No. 10-559, 2011 WL 1259712, at *4 (S.D.Ill. Mar. 31, 2011); Public Patent Found., 2011 WL 1142917, at *4 (S.D.N.Y. Mar. 22, 2011); Hy Cite Corp. v. Regal Ware, Inc., No. 10-168, 2011 WL 1206768, at *4 (W.D.Wis. Mar. 15, 2011); Shizzle Pop, LLC v. Wham-O, Inc., No. 10-3491, 2010 WL 3063066, at *3 (C.D.Cal. Aug. 2, 2010); Zojo Solutions, Inc. v. Stanley Works, 712 F.Supp.2d 756, 758 (N.D.Ill. 2010); Pequignot, 640 F.Supp.2d at 728. The Northern District of Illinois' decision in Simonian is illustrative of such cases. Rejecting Unique, the Simonian court held that Morrison does not apply to the same degree insofar as the action under which a false marking relator proceeds is a civil action. See Simonian, 2011 WL 1599292, at *4.
The Simonian court found, moreover, that section 292(b) provides sufficient safeguards to the government's interests. See id. For example, following actions under section 292, (1) district court clerks are required to apprise the Executive Branch of the action, see 35 U.S.C. § 290 (requiring the clerks of the United States courts to give notice of claims brought under Title 35 to the Director of the Patent and Trademark Office ("PTO")); (2) the government may intervene in the action, see Fed.R.Civ.P. 24; and (3) any settlement would require the government's approval following intervention, see Fed.R.Civ.P. 41(a)(1)(A)(ii) (dismissal by the plaintiff is permissible provided a "stipulation of dismissal" is "signed by all parties who have appeared").
Finally, as courts rejecting Take Care Clause challenges to section 292(b)'s qui tam provision often do, the Simonian court pointed to practical considerations militating against finding the statute unconstitutional. See Simonian, 2011 WL 1599292, at *5 (noting that the Federal Circuit would have addressed the issue sua sponte if it perceived a Take Care Clause problem); see also Hy Cite Corp., 2011 WL 1206768, at *5 ("[D]efendants have not only failed to show that the government's ability to exercise authority in this case through the cited avenues has been thwarted or even inhibited, the government's participation as amicus is strong evidence to the contrary.").
It is against this legal landscape that the Court turns to evaluate Defendant's constitutional challenge.
Separation of powers is deeply embedded in our constitutional structure, reflecting the Framer's recognition that "structural protections against abuse of power [are] critical to preserving liberty." Bowsher v. Synar, 478 U.S. 714, 730, 106 S.Ct. 3181, 92 L.Ed.2d 583 (1986); see Buckley v. Valeo, 424 U.S. 1, 122, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) ("The Framers regarded the checks and balances that they had built into the tripartite Federal Government as a self-executing safeguard against the encroachment or aggrandizement of one branch at the expense of the other."). Broadly speaking, it is violated when one branch of government aggrandizes itself at the expense of another, see Bowsher, 478 U.S. at 727-28, 106 S.Ct. 3181, or when one branch of government "impermissibly undermine[s]" another branch, Commodity Futures Trading
1. Morrison's Sufficient Control Test Governs
Here, the question presented to the Court is whether the False Marking Statute's qui tam provision violates separation of powers by impermissibly undermining the President's ability to "take Care that the Laws be faithfully executed." U.S. Const. art. II, § 3. In considering the same inquiry with respect to the False Claims Act's qui tam mechanism, many courts have applied Morrison's sufficient control test and upheld the qui tam provision in light of the controls the False Claims Act reserves for the Executive Branch. See, e.g., Taxpayers Against Fraud, 41 F.3d at 1041; U.S. ex rel. Kelly v. Boeing Co., 9 F.3d 743, 754-55 (9th Cir.1993); U.S. ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148, 1155 (2d Cir. 1993).
First, the Court believes that the nature of qui tam actions necessarily requires inquiry into whether the relevant qui tam provision affords the Executive Branch "sufficient control . . . to ensure that the President is able to perform his constitutionally assigned duties." 487 U.S. at 696, 108 S.Ct. 2597. Qui tam statutes, after all, always reflect at least some delegation of the Executive Branch's law enforcement authority. See Brockovich v. Cmty. Med. Ctrs., Inc., No. 06-1609, 2007 WL 738691, at *5 (E.D.Cal. Mar. 7, 2007) (noting that "qui tam statutes generally have important procedural safeguards, since they involve the delegation of some sovereign attributes from the government to the private citizen" (internal marks omitted)); see also Marra v. Burgdorf Realtors, Inc., 726 F.Supp. 1000, 1013 (1989). It is necessary to carefully evaluate whether, under the circumstances, the delegation made offends the Constitution's structural protections; Morrison's test facilitates this type of inquiry.
Second, the Court agrees with the Unique court that section 292(b) represents the very delegation of criminal law enforcement authority that Morrison's test was designed to assess. Its legislative history reveals as much: a key purpose of the 1952 amendment was to transform the statute into an ordinary criminal statute with a private enforcement mechanism. See supra Part IV.A.1. That the private enforcement mechanism happens to be civil in form does not change the fact that the wrong for which it enables relators to seek redress is the injury the United States suffers when a person or entity violates federal law.
The Court, therefore, will proceed to evaluate section 292(b) under Morrison's sufficient control test.
2. Application of Morrison
Applying Morrison, the Court finds that section 292(b) fails to provide the Executive Branch sufficient safeguards "to ensure that the President is able to perform his constitutionally assigned duties." 487 U.S. at 696, 108 S.Ct. 2597.
A comparison to the False Claims Act illustrates section 292(b)'s constitutional deficiency. The False Claims Act's qui tam provision requires the United States to: receive the complaint and relevant information before the defendant is served, see 31 U.S.C. § 3730(b)(2); have an evaluatory period during which the complaint is filed under seal and the defendant is not apprised of the complaint, see id.; and have the "primary responsibility" for prosecuting the case if it elects to intervene in the case, see id. § 3730(c)(1). In addition, the United States enjoys significant rights in False Claims Act qui tam litigation, including the right to: not be bound by the relator's acts if it opts to intervene, see id.; seek dismissal or settlement of the action over the relator's objections, see id. § 3730(c)(2)(A)-(B); and prevent dismissal by the relator, see id. § 3730(b)(1). Moreover, in the event the United States opts not to intervene, it still enjoys the right to: limit discovery, see id. § 3730(c)(4); and receive all pleadings upon request, see id. § 3730(c)(3).
The False Marking Statute, by contrast, contains no such statutory limitations on its qui tam provision. Broadly permitting "any person" to "sue for the [$500] penalty" in section 292(a), it requires no notice to the United States, and provides no means by which the United States may control the initiation, prosecution, or termination of litigation commenced on its behalf. 35 U.S.C. § 292(b). The what, when, where, and how of the litigation remain subject to the whims of whomever sees fit to bring the suit. Under these
Moreover, the supposed protections created by other sources of law simply do not suffice to ensure that the President can take care that the laws of the United States be properly carried out. Cf. Simonian, 2011 WL 1599292, at *5 (concluding that "the government maintains a sufficient level of control over qui tam actions brought under Section 292(b)"). First, the fact that notice of all pending patent cases is provided to the PTO within one month of filing, see 35 U.S.C. § 290, does not constitute sufficient notice to the Executive Branch. This notice is not expedient enough to provide the United States with sufficient time to protect its interests, and is not directed to the Department of Justice—the agency responsible for representing the United States' interests in a false marking suit. See Unique, 765 F.Supp.2d at 1005 ("[B]y the time the government is informed by the clerk of an action being filed, the case may have already been settled. This presents a unique problem with False Marking qui tam actions because relators are likely to be interested in a quick settlement without the delay and expense of protracted litigation.").
Second, the availability of intervention under the Federal Rules of Civil Procedure and the corresponding protections associated with intervention do not go far enough. While the United States could prevent a section 292(b) relator from voluntarily dismissing the case upon intervention, see Fed.R.Civ.P. 41(a)(1)(A)(ii), this requires the Court to order intervention on the United States' motion in the first instance, see Fed.R.Civ.P. 24. Although the Federal Circuit has reversed a district court for refusing to permit intervention in a false marking suit under Rule 24(a)(2), see Stauffer, 619 F.3d at 1328, it is not clear to the Court that intervention will or must be ordered in any given case. Moreover, as noted, a section 292(b) relator could voluntarily dismiss a case before the United States even has the opportunity to seek intervention at all. See Fed.R.Civ.P. 41(a)(1)(A)(i); Unique, 765 F.Supp.2d at 1004-05.
Thus, despite the external protections available, the United States is not able to effectively exercise even a basic degree of control over a section 292(b) relator's case.
For these reasons, the Court finds that section 292(b) fails to provide "the Executive Branch sufficient control . . . to ensure that the President is able to perform his constitutionally assigned [duty]" to "take Care that the Laws be faithfully executed." Morrison, 487 U.S. at 696, 108 S.Ct. 2597; U.S. Const. art. II, § 3. Consequently, the Court concludes that section 292(b) violates the Take Care Clause.
For the reasons explained above, Defendant's motion to dismiss for failure to state a claim will be denied. Because the Court finds section 292(b) to be unconstitutional under Article II's Take Care Clause, Defendant's motion to dismiss on constitutional grounds will be granted. An appropriate Order will follow.
It is hereby further
It is hereby further
Seizing on the distinction between proprietary and sovereign injuries, courts accepting Article III challenges to section 292(b) held that Vermont Agency does not allow otherwise uninterested parties to sue by virtue of the qui tam provision because section 292 violations constitute purely sovereign injuries that cannot be assigned. See U.S. ex rel. FLFMC, LLC v. Wham-O, Inc., No. 10-0435, 2010 WL 3156162, at *8 (W.D.Pa. Aug. 3, 2010) ("The Court concludes that general standing principles are consistent with assignment principles, and therefore, plaintiff cannot claim representational standing because the government cannot assign a purely `sovereign injury' to a private party."); Stauffer, 615 F.Supp.2d at 254 ("In most qui tam actions, the alleged injury in fact to the United States as assignor is obvious and proprietary.... In the context of a section 292 claim, however, the injury to the United States as assignor is far less evident."). The Federal Circuit rejected this distinction entirely, concluding that qui tam relators had standing to sue even if the injury sustained by the United States was a purely sovereign one. See Stauffer, 619 F.3d at 1326 ("Contrary to the district court's decision ... Stauffer's standing as the United States' assignee does not depend upon the alleged injury to the United States being proprietary, as opposed to sovereign."); see also Juniper Networks, Inc. v. Shipley, 643 F.3d 1346, 1353, 2011 WL 1601995, at *6 (Fed. Cir.2011).